I’ve been working on the Blue Diamond deal for about 2 ½ months. I’ve met with the seller probably 3 times. None of the meetings have been “negotiating” meetings, more information gathering, and information requests. One of the things that bug the shit out of me meeting the seller face to face is that he has said words to the effect, “I don’t know who you’re representing.” The implication is that I’m a front person for someone else. There is no doubt if I were white, this wouldn’t be an issue. Fuck that! I’m not representing anybody you fucker.
I’ve pursued other deals and consummated deals where I didn’t have the foggiest how they would get funded; however, before entering into a deal, there is a funding plan and institutions interested in funding the deal; otherwise, I wouldn’t pursue it. It would be a waste of my time.
There really are times when you can and should ask the question, “who are you representing” but the question is more, “how do you plan to fund the transaction.” If you’re buying a house, you get asked for a “pre-approval” letter, sometimes. Trust me, there are areas and transactions where “some realtor’ won’t ask this question of “buying prospects.” But, asking me who I’m representing is a fucking insult, all day, every fucking day.
At the last meeting, he brought his brother. The three of us sat down at a Starbucks. His brother has a company that owns 6 of the 14 stores that I want to buy. Prior to the last meeting is sent the form of a letter of intent addressed to both so, it was appropriate for the brother to be there.
They started with this same bullshit again, “who is Braeswood?” Normally, I would be offended and as far as they were concerned, I was not offended; however, internally, I wanted to say, “fuck both of you.” I remained cool and gave the answer I have given many before, ‘Braeswood is my company. I own 100% of it. It is a holding company owns my mortgage company and my real estate development company.’ They didn’t ask anything about Valley (the mortgage company) or Hammertree (the RE development company). Whenever I tell others about those subsidiary companies there is always some discussion, sometimes more, sometimes less, about what those companies do. Nothing from these two fuckers because they are trying to confirm that some white man has his hands up my ass or there is a puppeteer calling the shots. What’s really fucked up is that these to assholes are of middle eastern descent. Ain’t that a bitch?
Let me give them the benefit of the doubt for a minute. I’m not a big fan of BOD, because people of color rarely, if ever, get the BOD. But let’s say for shits and giggles, there was some concern about me representing somebody else. This is so easily handled in a letter of intent or the contract. You just say ‘you can’t assign the contract to a 3rd party.’ This language or some version of this language has been in every buy/sale contract or letter of intent that I have ever executed, everyone, no exception. It’s standard language in almost every buy/sale contract.
To continue along that theme, what if I am representing somebody else? What different would it make? If you stand to get millions of dollars would you give a fuck, especially when your stated goal is to get millions of dollars?
Let’s say the concern is my ability to fund the transaction. Why not simply ask that question? I’m far enough along where I could provide an answer but I’m not going to answer a question that hasn’t been asked and disclosure what at this point is confidential and could be used to fuck up my deal. People that question who you are have not problem asking others about shit they have no business asking.
At this last meeting, we covered quite a bit of ground, like: status of store leases and how I could possibly get out of the lease agreements; status of the fuel systems, my plans for branding; timing of a possible closing and most importantly, what I needed from them to move forward. Keep in mind, this meeting was prior to my meeting with both Shell and Chevron.
One of the fucked-up aspects of this transaction, and there are more than one, is that these stores are leased to 3rd party operators and there is no operator that operates more than one store. The seller(s) act as landlords and collect triple net lease payments each month. I reference this in the post/page on Blue Diamond. At this meeting, we discussed how the seller could help me and the transaction navigate getting out of these leases and my company assuming operations on day-1.
The plan was for the sellers to act as a go-between and coordinate with the “tenants” or operators so I could buy any equipment that they own, i.e. shelves, registers, etc., and pay some about for the “going concern” operation and otherwise release them from the lease they have with the seller. Seems like a tall task but the sellers agreed they were in the best position to make this happen and had relationships with the tenants where they could facilitate the ask. They also agreed that they would get me the leases within a week for me to review.
To their credit, one of the things they acknowledged was that they can’t really talk about price or ask me what I was willing to pay without getting me information. What they are concerned about is me low-balling them. They know they have shitty assets and half these fucking stores are not even open. They were volunteering to take assets off the table because they were not open or in horrible condition. We want all their pile of shit. Interestingly, the Chevron peeps included some of the shittiest assets in the locations they would brand, assuming either a raze and rebuild or major renovation. So yes, we want these shitty assets.
This no doubts a shitty transaction for shitty assets; however, there is great value in shit if I can clean it up. It must be cleaned up a piece at a time, so people other than me understand the pieces, like my financing sources for instance.
Both lenders and the private equity firm that I am currently talking to are aware of the “shittiness” of this deal but neither has said no, so far. They are counting or me or looking to me to pull it together so it’s easy for them to digest. One of the most important things I can do is make the closing transaction seamless and take over operations on day-1. We can’t close on the real estate then be 3-4 or 6 months later breaking leases. These are shopping centers; they’re individual retail stores and we need full control day-1 and to be operational day-1. So that’s the goal, in all aspects of this transaction.
The big question is whether these fuckers are really committed to the transaction or whether they question my ability to get it done. Look, not everything, every issue is centered around race. It’s not but when you’ve seen bullshit before and dealt directly with bullshit and understand the language of bullshit, it’s easy to recognize bullshit. This is bullshit. The challenge is getting around the bullshit to get what you want. Sometimes you can make it happen and other times you just say fuck it and move on. We’re close to the fuck it stages. If a mutha fucka stand to get millions of dollars and wants millions of dollars but can’t see his way to navigating to get the millions of dollars, fuck em. You can’t fix that.
Here’s a quick comparison of the different parties in this transaction as of now. We have two banks, a private equity fund, Shell, and Chevron, all interested in this deal and giving the parameters on how to make it work. Most of them can clearly see that I’m black and as far as I’m concerned, they don’t give a fuck. They get comfortable that I have done this shit before and know the business. They stand to “get paid” from the transaction and they will get paid for less than the sellers. People that are motivated by financial or economic or (positive) social intent are easy to deal with. You know what to do.
Now, there are some major oil companies, you can see who is not mentioned but you can’t tell who I might be talking about, that have blown me off. I can’t tell the motivation as to why because they haven’t said. It could be their internal organization is ineffective is tracking down “sales” leads or I’ve been talking to a dick or something completely different. I don’t know. So, given where we are and the interest I have so far, my answer to them at this point is, that’s right, “fuck it.”
To try to move the seller(s) forward, I sent them this email. I can’t beg somebody to take my money, especially when they say they want it. There is nobody rushing to buy these shitty stores, especially as a group, and seller(s) have no interested in doing anything more than what they are doing with the operations.
We have been working on a possible acquisition of the stores that you and (“the brother”) own for more than a couple of months. I have desperately tried to get information from you to put a deal together. I have financing and other folk engaged all of whom are waiting for more information from me which I can’t seem to get from you.
There seems to be either a lack of interest in selling on your part or you feel that we are not able to buy. Neither of which makes the likelihood of a transaction that will be consummated.
If you truly want to cash out and begin a different venture, as you stated, I need your help to move this prospective transaction forward before the resources I have assembled on my end back out. I don’t want to lose the relationships I have built and will move to acquire different assets if you do not want to move forward
Let me know your intentions as soon as possible so we will know how we should focus our efforts.
I will be in Tyler for a week, through September 23rd.
Let’s see what happens. My guess, more of the same and I will move on. It will be tough to find other assets to buy, probably for the same reasons these clowns are not doing anything. More of that in another post and as we pursue another transaction, should it come to that.